Civil servants face UK’s biggest redundancy threat, poll finds

CIPD survey found that public sector pay increases stuck at 1% due to pay cap, half the level of the private sector

Many public sector organisations are planning to recruit and make redundancies at the same time. Credit: PA

A third of public sector employers plan to make redundancies this summer, with the highest number predicted in areas of public administration including the civil service, according to a survey by the Chartered Institute of Personnel and Development.

The poll by the the professional body for HR and people development found some 33% of public sector organisations plan to get rid of staff in the three months to September 2017, compared with 18% of private sector companies.

The sector with the highest proportion of intended redundancies, at 39%, is public administration and defence, which includes the civil service and local authorities.

The CIPD quarterly labour market outlook – which measures the difference between employers who expect to increase staff levels and who that expect to decrease them – found that overall growth in UK employment remains strong, showing an increase from +20 to +27 since the last report in May.

The rise in the number of employers expecting to increase staff numbers is especially pronounced in the private sector, but the outlook for the public sector has also improved, up to +5 from -6 since the previous report.

Public sector employers are also more likely to recruit new staff this summer, with more than three-quarters (77%) planning new hires, compared with 64% of private sector firms.

Despite intentions to make the highest number of redundancies, 72% of employers in the public administration and defence sector are planning to recruit new staff. The difference between the number of employers planning staff increases and those planning decreases was -16 in the three months to May 2017, but has risen to +3 in the summer months.

Speaking to Civil Service World, Gerwyn Davies, senior labour market analyst for the CIPD, said the higher redundancy activity in the public sector was no surprise, given the well-documented budgetary constraints.

"However, it seems that some public sector organisations are recruiting and making redundancies at the same time, which reflects the restructuring activity currently taking place within many public sector organisations," he said. "This is being driven by the rising pressure to deliver productivity improvements and put in place workforce development plans in many establishments, especially those that will be affected most by future restrictions from EU nationals."

He said that against the backdrop of future migration restrictions and a tight labour market, the need for workforce development plans is greater than ever.

Mike Clancy, general secretary of the trade union Prospect, told CSW the government is making redundancies despite the urgent need to address the implications of Brexit on the civil service.

“The government could face the false economy of paying for the costs of making staff redundant now, before having to rehire them in a few months’ time to deal with responsibilities transferred from the EU,” he said.

The CIPD report also shows that wage growth remains weak across the board but especially in the public sector, where employers are expecting a 1% increase in median basic pay in line with the ongoing cap, while staff in the private and voluntary sectors should see pay growth of 2% and 1.4% respectively.

More than three-quarters of public sector organisations (72%) say that stagnant wages are due to public sector pay restraint. Pay was frozen for two years in 2010, and increases have been capped at 1% since 2012. This cap has seen incomes fall by 15% in real terms since 2010, according to Prospect.

Almost a fifth (18%) of public sector employers expect to freeze pay in the year ahead compared with around one in ten (10%) private sector employers.

About the author

Tamsin Rutter is senior reporter for Civil Service World and tweets as @TamsinRutter

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